"Institutional investors expand altcoin options strategies…for volatility management and supplementing returns"

An analysis has found that institutional investors are expanding strategies they used in the Bitcoin (BTC) options market to altcoins.

On the 30th, crypto outlet CoinDesk reported that digital-asset derivatives trading firm STS Digital said, "The trend of institutional investors actively using altcoin options trading is becoming clearer." It said this is to respond to price volatility while securing additional returns.

STS Digital's co-founder and CEO, Maxim Seiler, said, "Our clients include token projects and foundations, large holders, and asset managers facing liquidity events," adding, "Recently, cases applying option strategies mainly used in Bitcoin to the altcoin space have been increasing."

It was reported that recently project founders, foundations, venture capital firms, and large holders are also using options to manage price volatility risk.

STS Digital expects that demand for options will continue to expand, centered on Bitcoin and major altcoins. CEO Seiler said, "As institutional adoption accelerates, options are becoming a preferred means of managing digital asset exposure," adding, "Correction phases and low volatility periods are being seen as entry opportunities ahead of the next market catalyst."

Meanwhile, options are derivatives that grant the right to buy or sell assets at a predetermined price at a specific time. Call options are used to bet on price increases, while put options are used as a hedge against price declines. Option sellers receive a premium but bear the risk from price fluctuations.